A recent report from the University of Hawai’i Economic Research Organisation (UHERO) illustrated a dark forecast, worse than the aftermath of 9/11, for tourism to Hawai’i and across the USA. It’s not all doom and gloom in the report says Ian Youngman, but for medical tourism it could mean that some countries may no longer seek to attract medical tourists.
The pandemic has turned 2020 into a lost year for the travel industry. Hawai’i’s tourism industry was essentially shut down from March 2020, and UHERO has forecast that visitor arrivals by air and inflation adjusted visitor spending in 2020 will be down 73% from 2019 levels.
The UHERO report, “The Future of Travel and Tourism After the COVID-19 Pandemic” by Paul Brewbaker, Frank Haas and Professor James Mak argues that decisions made by tourism and government leaders in the near future will be critical for the global industry.
This report examines what the future of tourism might look like, primarily in the USA and future implications for Hawai’i tourism. Given Hawai’i’s economic dependence on tourism (only Nevada is more dependent on tourism) the state ranks among the worst in economic performance during the current pandemic. A long and uncertain road to tourism recovery lies ahead.
Attracting high spending, low impact visitors
Health experts warn that COVID-19 may be around for years, and even with a vaccine eventually available, people may still be apprehensive about travelling.
The international consulting firm, Oxford Economics, forecasts the USA will see a 76.5% decline in international inbound arrivals in 2020, equivalent to 61 million fewer visitors, and full recovery to 2019 levels is not expected until 2025 or 2026.
UHERO says that Hawai’i is already an expensive place to visit and maintaining current health protocols and increasing travel costs associated with measures to address climate change will make a Hawai’i vacation even more expensive.
Hawai’i Tourism Authority’s latest plan, adopted before the pandemic, calls for the state to focus less on the number of visitors and more on attracting high spending and low impact visitors. Lawmakers are also revisiting the discussion on diversifying away from tourism.
Combatting the fear of flying
Following the 9/11 terrorist attacks in 2001, the U.S. travel industry was crippled. While airlines lowered fares to entice people to fly, the Department of Homeland Security imposed heightened security requirements that added greatly to the time, cost, and hassle involved in flying. These changes along with the fear of terrorism induced travellers to switch to land modes of transportation, especially for shorter trips. A resultant weak economy reduced domestic and international travel, but Hawai’i benefited from the substitution, as many Americans opted to visit the islands instead of foreign destinations.
Fear of flying is not the only impediment to travel; travel restrictions, especially border closures and quarantines, and virus testing requirements and delays also discourage people from travelling.
But, the report argues, time and time again tourism has shown its resilience after major shocks. Tourism bounced back from 9/11 (2001), the SARS epidemic (2003) and the global financial crisis (2008).
A coalition of US travel companies and organisations (Let’s Go There Coalition) is developing a massive ad campaign to urge Americans to start planning for their next trip to anywhere.
Tourism, says the report, will return from the COVID-19 pandemic but certainly with lasting changes. The future will be shaped by the choices tourism’s decision makers (consumers, suppliers, and destination residents) make in the face of new realities.
New dramatic tourism trends
Many people, especially the elderly, will either opt to not travel or limit their travel. Those who travel will do so within their own countries or within a new system of interlocking safe zones.
Travel will also take a bigger slice of our smaller disposable incomes. Many health protocols will become permanent.
The report predicts that two dramatic trends will occur:
- Some governments will redesign their tourism strategies to become better stewards of their destinations.
- Other governments will do the opposite by racing to the bottom and return to over tourism.
Responsible citizens, passionate travellers
The pandemic is accelerating some tourism changes that were underway for some time.
Smart travellers, the report suggests, will opt to visit places with good governance and health systems. They will take fewer trips but stay longer. They will see this pandemic as a harbinger of what is to come from the climate crisis. They will act like responsible citizens as well as passionate travellers.
The next wave of travel will not be driven by the desire to go to hot spots or top-ten-list destinations. It will be the desire simply to go, and to figure things out along the journey. Road trips and adventure travel will be popular, but not packaged tours. There will be a boom in domestic travel.
Rethinking the role of residents
Many predictions about tourism are based on expectations of what tourists and tourism suppliers want, and not necessarily what destination residents want. Some governments have responded to political pressure exerted by constituents by imposing strict regulations on vacation rentals and city tourism.
The current pause in travel and tourism due to COVID-19 provides opportunities for residents of tourist destinations to rethink the role of tourism in their communities. Even before the pandemic, residents of many destinations have been demanding more say on tourism in their communities to make sure that their wellbeing comes first. This will continue.
Hawai’i is especially vulnerable to post-COVID-19 changes in travel and tourism. Travel to Hawai’i was expected to slow in the next 25 years even before the COVID-19 pandemic. The earlier prediction is now probably too optimistic.
However, the report suggests that the expected slowdown in the number of tourist arrivals may not entirely be a bad thing. Hawai’i must now develop a smart tourism plan and focus on strategic marketing using data mining and analytics to target higher-spending/high-yield visitors. It must invest in the state’s tourism infrastructure to provide a visitor experience that will entice higher spending visitors to come.
Until recently technology has been used largely to increase profits of tourism suppliers and reduce the cost of travel to consumers. In the future, technology (‘smart tourism’), will also be used increasingly to aid destination management.
The state has made numerous attempts to diversify the economy in recent decades with little success. Studies are presently underway to review past diversification.
Impact for medical tourism
Even before the pandemic, many countries were not getting as many medical tourists as they had hoped for. Most medical travel destinations have not changed from trying to attract quantity to quality and have not considered concerns about over tourism or the effect on local healthcare.
There is a debate between those who believe it will return to normal, and those who think there will be a new normal. The latter have the edge but there is a third possibility. Some countries may no longer seek to attract medical tourists, ever.
This is because fewer older people will fly or travel long distances, and while they may travel for health tourism, simple surgery will be either domestic or regional. Country honesty (or dishonesty) on Covid numbers will also remain in memories, while medical and health tourists will prefer places that have established real health and safety protocols across travel, tourism and medical treatment.
So, the medical travel destinations still looking for ever increasing numbers of medical tourists, or whose Covid security begins and ends at the airport, will get a nasty shock. Those who turn quickest to higher spending, longer staying health and medical tourists, and who have real, joined up health and safety protocols, are likely to have a better chance of survival.
It may be a very bumpy ride in the next few years, but it will not be boring.
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